General Business Set-Up Information

Anyone who registers a business in Tennessee must ensure they indicate their business structure, which is necessary to establish tax accounts.

A sole proprietorship is typically one individual in business alone. Sole proprietorships are the most common form of business structure.

• The primary entity number for a proprietorship is the social security number (SSN) of the sole person.
  
• Federal name: Sole Proprietorship
  
• Ownership information needed: Name and SSN of owner.

An additional type of sole proprietorship is a marital joint account. Married individuals that own the business together can set up this business structure.

• The primary entity number for a joint ownership is the SSN of the primary spouse. However, the other spouse’s SSN is also needed. Upon registration, the state will assign a joint identification number to the business's tax account.
  
• Federal name: Sole Proprietorship—each spouse completes a separate Schedule C for their portion of earnings and attaches it to their 1040 federal income tax return.
• Ownership information needed: Names and SSNs of both spouses.

Registration for a sole proprietorship will be under the owner's legal name. However, the business's operational name, "doing business as" name (DBA), may be entered during the registration process.

A general partnership is an entity composed of two or more persons who agree to contribute money, labor, and/or skill to a business. Each partner shares the profits, losses, and management of the business and each partner is personally and equally liable for debts of the partnership.

• The primary entity number for a partnership is the entity’s federal employer identification number (FEIN).
  
• Federal name: General Partnership.
  
• Ownership information: Name and social security number (if available) of each owner.
  

A limited partnership (LP) or limited liability partnership (LLP) is a business type composed of one or more general partners and one or more limited partners. The general partners have full management and control of the business and have full personal responsibility of all debts and liabilities of the business. The limited partners have no personal responsibilities for debts and liabilities beyond the amount of their investment interest and cannot participate in the management of daily operations.

• The primary entity number for a partnership is the entity’s FEIN.
  
• Federal name: Limited Partnership.
  
• Ownership information: Name and social security number (if available) of the general partner.
  

A single-member limited liability company (SMLLC) is formed by one individual or entity through a special written agreement. This entity has one member.

• The primary entity number for the LLC is the owner’s social security number or an entity’s federal employer identification number (FEIN).
  
• Federal name: Limited Liability Company.
  
• Ownership information: Name and social security number or FEIN (if available) of the person or entity owning the SMLLC.
  

A multi-member limited liability company (MMLLC) is formed by one or more individuals or entities through a special written agreement.

• The primary entity number for a multi-member LLC is either a person’s social security number or the owning entity’s FEIN.
• Federal name: Limited Liability Company.
  
• Ownership information: Name and social security number or FEIN (if available) of the person or entity owning the LLC.
  

A professional limited liability company (PLLC) is formed under a state professional limited liability company law and is a company engaged in the rendering of professional services.

• The primary entity number for a PLLC is the entity’s federal employer identification number (FEIN).
  
• Federal name: Professional Limited Liability Company.
  
• Ownership information: Name and social security number or FEIN (if available) of the person or entity owning the PLLC.
  

Corporations have more complex business structures. As a chartered legal entity, a corporation has its own rights, privileges, and liabilities. Doing business as a corporation may yield tax or financial benefits, but these can be offset by other considerations, such as increased licensing fees or decreased personal control. Corporations may be formed for profit or nonprofit purposes. Corporations chartered in Tennessee are Tennessee domestic corporations. Corporations chartered in other states are foreign corporations.

• The primary entity number for a corporation is the entity’s federal employer identification number (FEIN).
  
• Federal name: Corporation, C Corporation.
  
• Ownership information: Name and social security number or FEIN (if available) of the person or entity owning the corporation.
  

A S corporation is one which has elected S status and is generally exempt from federal income tax other than on certain capital gains and passive income. Its shareholders include on their tax returns their share of the corporation's separately stated items of income, deduction, loss, and credit. These amounts are referred to as "flow through item."

• The primary entity number for an S Corp is the entity’s FEIN.
  
• Federal name: S Corporation.
  
• Ownership information: Name and social security number or FEIN (if available)of the person or entity owning the S corporation.